REG - Creightons PLC - Half-year Report
04/12/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231204:nRSD4811Va&default-theme=true
RNS Number : 4811V Creightons PLC 04 December 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2023
Financial highlights
· Sales for the first half of the financial year were £27.6m
(2022: £29.7m). The Private label division saw an increase in sales of 9.8%
to £12.3m (2022: £11.2m). The Contract division has seen a decline in sales
of 37.1% to £4.9m (2022: £7.7m).
· The gross profit margin increased to 42.2% (2022: 40.4%).
· Administrative costs have decreased by 5.1% to £9.3m
(2022:£9.8m).
· The operating profit before exceptional costs increased to £0.5m
(2022: £0.3m). Operating profit before exceptional costs as a percentage of
sales increased by 0.9% points to 1.8% (2022: 0.9%).
· EBITDA (excluding exceptional) for the first half of the
financial year 2024 was £1.4m (2022: £1.1m).
· Diluted EPS was positive 0.37p (2022: negative 0.48p).
· Net short-term borrowings (cash and cash equivalents less
short-term element of obligations under finance leases and borrowings) at 30
September 2023 were £1.7m (2022: £4.7m). Net debt for the Group has reduced
to £6.0m (2022: £9.0m).
· Revenue generated from past acquisitions were split as follows;
Brodie and Stone brands £1.5m (2022: £1.2m), Emma Hardie Ltd £1.5m (2022:
£1.4m).
Operational highlights
· The Group has responded proactively to the unprecedented
challenges facing the business due to supply chain constraints, higher
commodity, and energy prices. The remedial measures were intended to restore
profitability, reduce costs and inventory and to return to positive cash flow.
Specifically, actions were taken in the following six areas:
o Sales team continued the process of Cost Price Increase (C.P.I) monitoring
across all categories of supply. This was used as the basis to negotiate sales
price increases with the customers. This has proved successful.
o Manufacturing team reducing to one shift at both Peterborough (September
2022) and Devon (September 2023).
o The one shift policy continues to reduce energy costs.
o Increasing efficiency has increased capacity in each factory so as to
maximise the benefit of single shift working.
o Restructuring warehousing and logistics to bring in house picking and
packing of finished goods; a task that has made progress in the six months.
o We have achieved stock reductions of £2.4m to the end of September 2023,
achieving a closing stock balance of £10.4m when compared to the same period
in the previous year (2022: £12.8m) without any reduction in effective
service levels to customers.
Financial overview
Sales
Net sales movements for Branded sales reduced to £10.4m (2022: £10.8m),
Private label sales increased to £12.3m (2022: £11.2m) and Contract sales
reduced to £4.9m (2022:£7.7m).
Six months ended Six months ended Movement vs Same Period Last Financial Year % Change vs Same Period Last Financial Year
30 September 2023 30 September 2022
(Unaudited)
(Unaudited)
£000 £000 £000
Branded 10,417 10,774 (357) (3.3)%
Private Label 12,259 11,165 1,094 9.8%
Contract 4,868 7,737 (2,869) (37.1)%
Other 11 - 11 -
Net sales 27,555 29,676 (2,121) (7.1)%
The sales of the business are generated from three main revenue streams,
Branded, Private label and Contract. Each of these revenue streams are
reported in the statutory accounts under Revenue net of deductions. These
sales related deductions consist of Contracted retailer support, Settlement
discounts, and Retailer promotions. These activities are sales related
activities that help generate additional revenue for the business.
When observing gross sales, the Branded sales stayed comparable year on year
at £11.6m, Private label sales increased to £12.4m (2022: £11.4m) and
Contract sales reduced to £4.9m (2022:£7.8m).
At a gross sales level, Branded sales have not experienced a decline, the
Group has sacrificed revenue to foster the growth of Branded sales through
Retailer support and promotions. This marketing approach is part of a
long-term strategy aimed at expanding the Branded division.
Gross Profit Margin
Gross profit margin increased in the period to 42.2% (2022: 40.4%) due to the
recovery from our customers of higher input costs. The Group implemented
systems and processes to monitor Cost Price Increase (C.P.I) across all
categories of supply. These included but were not limited to, plastics, raw
materials, energy, wage inflation and transport (global and domestic) costs.
Overheads
Distribution costs have decreased by 3.9% to £1.9m (2022: £2.0m) and now
represent 6.8% of sales (2022: 6.6%). Underlying costs associated with
outsourcing the warehousing and third-party storage have decreased by £0.2m
to £0.4m (2022: £0.6m). Progress has been slower than anticipated, however a
phased approach was undertaken to ensure consistency of supply and service
levels. Progress will continue to be made in the second half of the year which
will have a positive impact on both costs and the efficiencies of the business
going forward. Outward freight has increased by 14.3% to £0.8m (2022:
£0.7m), due to increased cost of freight and the sales mix.
Administration costs have decreased by 5.2% to £9.3m (2022: £9.8m). A huge
driver of the decrease in overheads was the decision made by the Group to move
to a single shift. The reduction in head count accounted for £0.3m of the
decrease when comparing the 6 months ending September 2023 to the
corresponding period to September 2022. The reduction in labour has not had an
impact on the output of the factory and thus has not impacted on the ability
to meet customer demand. Manufacturing efficiencies have been enhanced whilst
not compromising on customer delivery. The efficient utilisation of the
factory along with the decrease in units sold has meant that utility costs
have reduced to £0.3m (2022: £0.5m).
Operating profit before exceptional costs
Operating profit before exceptional costs was £0.5m (2022: £0.3m), which
represents an increase of £0.2m. This is a direct result of the improvement
in the gross profit margin. Strategic sales price increases that balance
competitiveness with profitability have positively impacted the operating
profit margin. Customer price increases have improved the gross profit margin.
Additionally, the Group has been efficient in the management of its operating
costs relative to its revenue. As a result, a greater percentage of revenue is
translated into profit after covering operating expenses. Operating profit
margin before exceptional costs increased to 1.8% (2022: 0.9%).
Tax
The tax charge provided in the accounts is £0.02m (2022: £0.03m).
Earnings per share
The diluted earnings per share was positive 0.37p (2022: Negative 0.48p).
Dividend Payments
The Board does not propose an interim dividend (2022: Nil), reflecting the
challenging and volatile economic conditions facing the Group and the need to
be prudent about utilisation of cash resources. This is consistent with the
directors' objective to align future dividend payments to the future
underlying earnings and cash requirements of the business.
Working capital and short-term borrowings
Net short-term borrowings were £1.7m (2022: £4.7m). The increase in short
term borrowings in the previous period were largely a result of the Emma
Hardie acquisition, which resulted in a cash out flow of £2.0m. A combination
of improved trading performance and reduction in stock levels has meant
cash-flow has improved. The Group continues to set aggressive targets to
reduce purchasing commitments. Net debt for the Group have reduced to £6.0m
(2022: £9.0m). The Group has access to cash by way of an invoicing finance
facility that is currently in place and could support the cash position by up
to a further £5.7m.
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2023
Chairman's statement
Key pressures faced in the period:
As we indicated in the Chairman's statement in the financial statements to 31
March 2023, this represented among the most challenging trading years ever
faced by the Group. Since November 2022 the Group faced significant supply
chain and inflationary pressures. These pressures contributed to higher input
and overhead costs and reduced profitability. Our response was to embark upon
a six-point programme designed to restore margins, reduce costs, lower stocks
levels and return the business to positive cashflow. This included moving to a
single shift at the Peterborough and Devon site.
The Branded division has been challenged in the current year. There has been a
significant decline in a key export market which has suffered a sharp economic
downturn. We anticipate this will start to recover during the second half as
orders are starting to flow through again.
As highlighted last year, the Contract side of the business continues to see
reductions in order demands. This is due to brands being overstocked and
therefore, requiring less manufactured stock during 2023. However, both the
Private label and Branded divisions continue to gain momentum.
Key achievements in the period:
We remain committed to seeking further cost and overhead reductions and to
restoring margin and overall profitability to previous levels. In spite of the
significant challenges faced by the Group and the wider economy, I am pleased
to report that the Group has been successful in:
- Growing the Private label division by increased Sales by an
impressive 9.8% which partially offsets the decline in the Contract
manufacturing business for the six-month period to 30 September 2023.
- Restoring the Gross Profit Margin to 42.2%, in line with historic
levels.
- Reducing Admin and Distribution costs (excluding exceptional items)
by £0.6m to £11.1m (2022: £11.7m).
- Improving EBITDA by £0.3m to £1.4m (2022: £1.1m).
- Reducing stock holding by £2.4m to £10.4m (2022: £12.8m).
- Improving Net cash on hand by £3.0m to a net borrowing balance of
£1.7m (2022: net borrowing £4.7m).
The Group is generating positive EBITDA, which indicates it is generating more
earnings from its core business operations. Once the financial stability has
been successfully achieved, the Group's focus will be to pursue new growth
opportunities through continuing to invest in research and development,
improving manufacturing efficiencies and expanding into new markets.
Building a team for the future:
Bernard Johnson ceased being a member of the board of directors on 24 November
2023. In addition, he also ceased serving the business in his capacity as
Managing Director (MD). The process to replace him is well underway and we
anticipate making a comprehensive announcement in due course. In the interim,
our dedicated executive team, under the current leadership of Philippa Clark
and Martin Stevens, remains fully committed to delivering effective
operational management. The team is actively engaged in developing strategic
plans aimed at enhancing our sales performance, achieving greater operational
efficiencies, and exploring new avenues for business growth. We recognize the
importance of maintaining stability and focus during this transitional period,
and our collective efforts are geared towards sustaining and advancing the
positive trajectory of our organisation.
Continuing to invest and build a strong middle and senior management team
remains a key priority. We currently have a diverse and accomplished team
which bring a wide range of experience and management across all key
operational, finance, sales and marketing areas of the business. This team
consists of many long serving colleagues who have developed and grown with the
business as it has moved forward and navigated challenges. This has resulted
in not only a strong united group working towards the same objectives, but
also a team that understand the demands and changing needs of the business.
The Group's performance to date is a tribute to the tenacity and resilience of
these teams who continue to demonstrate the ability to take advantage of
available opportunities and manage potential risks.
Future Developments:
The Group's dynamic structure continues to give it competitive advantage
allowing it to respond quickly and effectively to customer requirements. It
also provides a competitive advantage with post-acquisition integration by
providing synergies not available to all market participants.
Key sales priorities are in the Private Label and Branded divisions, we are
therefore diverting resources from the Contract business to take advantage of
growing and ongoing opportunities. This includes additional investment in
digital platforms, websites and social sites supporting the promotion of our
brands.
Our Research and Development team have embarked upon formulation development,
attaining market knowledge and manufacturing capabilities to enter the
sizeable Suncare and SPF skincare categories. This presents a significant
opportunity in both the Private label and Contract manufacturing categories.
It will also translate into some of our existing skincare brands.
Developing key markets in both the USA and China with our leading brands Emma
Hardie and Feather & Down is a priority. Considerable time and investment
has already been undertaken in China with the Emma Hardie brand where we are
now launched on a number of digital platforms including Tmall and Douyin. The
Feather and Down brand is launching on Amazon in both the USA and German
markets, key stepping stones in securing listings with mainstream retail,
whilst the Emma Hardie brand already exhibits a presence in those markets, we
intend to expand in these strategic areas.
Conclusion
In common with most UK manufacturing businesses, we are operating in a period
of significant inflationary pressures and weakening consumer demand. Our
objective is to meet our customer expectations and to deliver top line sales
growth whilst also relentlessly focusing on the areas within our control
including recovery/mitigation of cost price increases, delivery of the cost
reduction programme and reduction in stock levels. The margin recovery and
pro-active cost reduction measures we have taken will continue to deliver an
improved performance in the second half of the year.
I would like to take this opportunity to thank each and every one of the
Group's employees who have continued to pull together through an exceptionally
difficult period to enable the Group to deliver an improving trading
performance. I would also like to thank our customers, shareholders and
suppliers for their support and loyalty to the Group.
W O McIlroy
Executive Chairman
01 December 2023
Responsibility statement
The names and functions of the Directors of the Company are as follows:
William O McIlroy Executive
Chairman and Chief Executive
Bernard JM Johnson Executive Managing Director (ceased
Directorship 24 November 2023)
Nicholas DJ O'Shea Non-executive Director
William T Glencross Non-executive Director
Martin Stevens Deputy Managing Director
Philippa Clark Deputy Managing Director
Paul Forster Non-executive Director
The Board confirms that to the best of its knowledge the condensed set of
financial statements gives a true and fair view of the assets and liabilities,
financial position and loss of the Group and has been prepared in accordance
with IAS 34 'Interim Financial Reporting', as endorsed by the UK and that the
interim management report includes a fair review of the information required
by the Disclosure and Transparency Rules as issued by the Financial Conduct
Authority, namely:
· DTR 4.2.7: An indication of important events that have occurred
during the first six months of the financial year, and their impact on the
condensed set of financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the financial year.
· DTR 4.2.8: Details of related party transactions that have taken
place in the first six months of the current financial year and that have
materially affected the financial position or performance of the enterprise
during that period. Together with any changes in the related party
transactions described in the last annual report that could have a material
effect on the enterprise in the first six months of the current financial
year.
Going Concern
The Directors are pleased to report that the Group has renewed its bank
facilities and continues to meet its debt obligations and expects to operate
comfortably within its available borrowing facilities. The Group's cash on
hand at 30 November 2023 is positive £0.9m. As at 31 March 2023 we carried
out a review of our cash requirements for the next 12 months. Scenarios were
modelled including the removal of the Group's largest customer and increases
of 20% in costs of raw materials or overheads. These models are more extreme
than the conditions prevailing during the 12 months to 31 March 2023 but
demonstrate that even without management tackling current overhead levels or
increasing prices to customers, the Group would not fully utilise available
bank facilities over the next 12 months from 31 March 2023. The Directors have
therefore formed a judgement, at the time of approving the Interim statement,
that there is a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future being at least
six months from the date of this report. For this reason, the Directors
continue to adopt the going concern basis in preparing the Interim statement.
By order of the Board
Nicholas O'Shea
Non-executive
Director
01 December 2023
Principal risks and uncertainties
The Board regularly monitors exposure to key risks, such as those related to
production efficiencies, cash position and competitive position relating to
sales. It has also taken account of the economic situation over the past 6
months, and the impact that has had on costs and consumer purchases.
It also monitors those risks not directly or specifically financial, but
capable of having a major impact on the business's financial performance if
there is any failure, such as product contamination and manufacture outside
specification, maintenance of satisfactory levels of customer and consumer
service, accident ratios, failure to meet environmental protection standards
or any of the areas of regulation mentioned above.
The principal risks and uncertainties and their associated mitigating and
monitoring controls which may affect the Group's performance in the next six
months are consistent with those detailed in the Annual Report and Financial
Statements 2023. The main risk facing the Group relates to the inflationary
pressures and weak economic environment. These are covered in detail in the
Chairman's statement.
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2023
Consolidated income statement - unaudited
Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended
31 March 2023
(Audited)
Note £000 £000 £000
Revenue 27,555 29,676 58,567
Cost of sales (15,923) (17,686) (34,219)
Gross profit 11,632 11,990 24,348
Distribution costs (1,874) (1,951) (3,902)
Administrative expenses (9,252) (9,758) (18,862)
Exceptional items - Redundancy costs 9 - (150) (165)
Operating profit 506 131 1,419
Exceptional items - Acquisition costs 9 - (313) (312)
Finance costs 6 (204) (177) (420)
Profit / (Loss) before tax 302 (359) 687
Taxation 4 (17) (26) (173)
Profit / (Loss) for the period from operations attributable to the equity 285 (385) 514
shareholders of the parent Company
Consolidated statement of comprehensive income - Unaudited
Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March
2023
(Audited)
£000 £000 £000
Profit / (Loss) for the period 285 (385) 514
Items that may be subsequently reclassified to profit and loss:
Exchange differences on translating foreign operations 8 (68) (9)
Other comprehensive income / (Loss) for the period 8 (68) (9)
Total comprehensive income / (Loss) for the period attributable to the equity 293 (453) 505
shareholders of the parent
Dividends
Note Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March 2023
(Unaudited)
(Unaudited)
(Audited)
Paid in year (£000) - - -
Paid in year (pence per share) - - -
Proposed (£000) - - -
Proposed (pence per share) - - -
Earnings per share
Note Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March 2023
(Unaudited)
(Unaudited)
(Audited)
Basic 3 0.42p (0.55)p 0.74p
Diluted 0.37p (0.48)p 0.65p
Consolidated balance sheet - unaudited
Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended
31 March
2023
(Audited)
Note £000 £000 £000
Non-current assets
Goodwill 2,857 2,853 2,857
Other intangible assets 10,931 10,883 10,894
Property, plant and equipment 5,636 6,165 5,890
Right-of-use assets 1,281 1,107 1,285
20,705 21,008 20,926
Current assets
Inventories 10,445 12,802 10,228
Trade and other receivables 12,474 14,518 12,733
Cash and cash equivalents 1,681 765 1,653
24,600 28,085 24,614
Total assets 45,305 49,093 45,540
Current liabilities
Trade and other payables 9,225 11,308 9,836
Corporation tax payable - - 3
Lease liabilities 387 301 373
Borrowings 3,000 5,136 2,502
12,612 16,745 12,714
Net current assets 11,988 11,340 11,900
Non-current liabilities
Deferred tax liability 2,948 3,006 2,942
Lease liabilities 797 838 917
Borrowings 3,031 3,900 3,488
6,776 7,744 7,347
Total liabilities 19,388 24,489 20,061
Net assets 25,917 24,604 25,479
Equity
Share capital 700 700 700
Share premium account 2,024 2,022 2,022
Merger reserve 2,476 2,476 2,476
Treasury shares 8 (576) (576) (576)
Other reserves (211) (211) (211)
Translation reserve 22 (45) 14
Retained earnings 21,482 20,238 21,054
Total equity attributable to the equity shareholders of the parent Company 25,917 24,604 25,479
Statement of changes in shareholders' equity - unaudited
Share capital Share premium account Merger reserve Treasury shares Other reserves Translation reserve Retained Earnings Total equity
£000 £000 £000 £000 £000 £000 £000 £000
At 1 April 2022 697 1,951 2,476 - (211) 23 20,742 25,678
Comprehensive income for the period
Profit for the six-month period - - - - - - (385) (385)
Exchange differences on translation of foreign operations - - - - - (68) - (68)
Total comprehensive income for the six months ended 30 September 2022 - - - - - (68) (385) (453)
Contributions by and distributions to owners
Exercise of options 3 71 - - - - - 74
Purchase of own shares - - - (576) - - - (576)
Share-based payment charge - - - - - - 179 179
Deferred tax through Equity - - - - - - (298) (298)
Dividends - - - - - - - -
Total contributions by and distributions to owners 3 71 - (576) - - (119) (621)
At 30 September 2022 700 2,022 2,476 (576) (211) (45) 20,238 24,604
Comprehensive income for the period
Profit for the six-month period - - - - - - 899 899
Exchange differences on translation of foreign operations - - - - - 59 - 59
Total comprehensive income for the six months ended 31 March 2023 - - - - - 59 899 958
Contributions by and distributions to owners -
Exercise of options - - - - - - - -
Share-based payment charge - - - - - - (78) (78)
Deferred tax through Equity - - - - - - (5) (5)
Dividends - - - - - - - -
Total contributions by and distributions to owners - - - - - - (83) (83)
At 31 March 2023 700 2,022 2,476 (576) (211) 14 21,054 25,479
Share capital Share premium account Merger reserve Treasury shares Other reserves Translation reserve Retained Earnings Total equity
At 31 March 2023 700 2,022 2,476 (576) (211) 14 21,054 25,479
Comprehensive income for the period
Profit for the six-month period - - - - - - 285 285
Exchange differences on translation of foreign operations - - - - - 8 - 8
Total comprehensive income for the six months ended 30 September 2023 - - - - - 8 285 293
Contributions by and distributions to owners
Exercise of options - 2 - - - - - 2
Purchase of own shares - - - - - - - -
Share-based payment charge - - - - - - 143 143
Deferred tax through Equity - - - - - - - -
Total contributions by and distributions to owners - 2 - - - - 143 145
At 30 September 2023 700 2,024 2,476 (576) (211) 22 21,482 25,917
Consolidated cash flow statement - unaudited
Note Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March 2023
(Audited)
£000 £000 £000
Profit from operations 506 281 1,419
Adjustments for:
Depreciation on property, plant and equipment 509 505 1,000
Depreciation on right of use assets 183 149 294
Amortisation of intangible assets 160 150 288
(Profit)/Loss on disposal of property, plant and equipment (7) 8 34
Share based payment charge 143 179 101
Redundancy payments - (150) -
1,494 1,122 3,136
(Increase)/decrease in inventories (217) (323) 2,250
Decrease/(increase) in trade and other receivables 259 (779) 776
(Decrease)/increase in trade and other payables (611) 1,182 (288)
Taxation paid - (70) (62)
Net cash from operating activities 925 1,132 5,812
Investing activities
Purchase of property, plant and equipment (251) (605) (825)
Purchase of right of use assets - (171) -
Purchase of intangible assets (197) (166) (315)
Acquisition of Brodie & Stone - - (75)
Acquisition of Emma Hardie 7 - (1,424) (1,424)
Net cash used in investing activities (448) (2,366) (2,639)
Financing activities
Proceeds on issue of shares 2 73 74
Principal paid on lease liabilities (339) (117) (436)
Interest paid on lease liabilities - (53) -
Cancellation of leases - - (35)
Interest paid on mortgage loan - (41) -
Interest paid on overdrafts and loans - (83) -
(Decrease)/increase in invoice financing facilities (454) 2,845 290
Increase/(decrease) of overdraft 887 (405) (600)
Repayment on term loan (426) (332) (816)
Repayment on mortgage loan facility (127) (84) (252)
Purchase of shares - Share buy back 8 - (576) (576)
Net cash used in financing activities (457) 1,227 (2,351)
Net decrease in cash and cash equivalents 20 (7) 822
Cash and cash equivalents at start of period 1,653 840 840
Effect of foreign exchange rate changes 8 (68) (9)
Cash and cash equivalents at end of period 1,681 765 1,653
Notes to the unaudited interim financial report
1. Basis of preparation
The interim financial statements for the six months ended 30 September 2022
and 30 September 2023 and for the twelve months ended 31 March 2023 do not
constitute statutory accounts for the purposes of Section 434 of the Companies
Act 2006. The Annual Report and Financial Statements for the year ended 31
March 2023 have been filed with the Registrar of Companies. The Independent
Auditors' Report on the Annual Report and Financial Statements for the year
ended 31 March 2023 was unqualified, did not draw attention to any matters by
way of emphasis, and did not contain a statement under sections 498(2) or
498(3) of the Companies Act 2006. The 30 September 2023 statements were
approved by the Board of Directors on 01 December 2023. This
unaudited interim report has not been audited or reviewed by auditors pursuant
to the Financial Reporting Council guidance on Review of Interim Financial
Information.
The condensed financial statements in this Interim Report have been prepared
in accordance with the requirements of IAS 34 'Interim Financial Reporting' as
endorsed by the UK.
As required by the Disclosure and Transparency Rules of the UK's Financial
Conduct Authority, the condensed set of financial statements has been prepared
by applying the accounting policies and presentation that were applied in the
preparation on the Company's published consolidated financial statements for
the year ended 31 March 2023, which were prepared in accordance with the
UK-adopted international accounting standards.
The condensed interim financial statements for the six months ended 30
September 2023 and the comparative figures for the six months ended 30
September 2022 are unaudited. The figures for the year ended 31 March 2023
have been extracted from the Annual Report on which the Auditors issued an
unqualified audit report and which have been filed with the Registrar of
Companies.
2. Significant accounting policies
Adoption of new and revised accounting standards
No new standards impacting on the Group have been adopted in its financial
statements for the year ended 31 March 2023 or the interims ended 30 September
2023.
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early. The Group does not
expect any of the standards issued by the IASB, but not yet effective, to have
a material impact on the Group.
3. Earnings per share - Unaudited
The calculation of the basic and diluted earnings per share is based on the
following data:
Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March 2023
(Audited)
£000 £000 £000
Earnings
Net profit attributable to the equity holders of the parent company 285 (385) 514
Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March 2023
(Audited)
Number Number Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings 68,430,950 69,832,186 69,166,461
per share
Effect of dilutive potential ordinary shares relating to share options 9,141,557 9,862,002 9,534,475
Weighted average number of ordinary shares for the purposes of diluted 77,572,507 79,694,188 78,700,936
earnings per share
Basic 0.42p (0.55)p 0.74p
Diluted 0.37p (0.48)p 0.65p
4. Taxation
Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March 2023
(Unaudited)
(Unaudited)
(Audited)
£000 £000 £000
Current tax (11) (43) 178
Deferred tax liability 28 69 (5)
Total 17 26 173
5. Notes to cash flow statement
Analysis of changes in net debt
6 months ended 30 September 2023 Overdraft Invoice Financing Mortgage Loan Total
£000 £000 £000 £000 £000
At 1 April 2023 26 1,557 2,467 1,940 5,990
Cash flows 887 (454) (127) (426) (120)
Interest 61 - 37 63 161
At 30 September 2023 974 1,103 2,377 1,577 6,031
6 months ended 30 September 2022 Overdraft Invoice Financing Mortgage Loan Total
£000 £000 £000 £000 £000
At 1 April 2022 495 1,267 2,642 2,645 7,049
Cash flows (405) 2,762 (127) (402) 1,828
Interest 83 41 35 159
At 30 September 2022 90 4,112 2,556 2,278 9,036
12 months ended 31 March 2023 Overdraft Invoice Financing Mortgage Loan Total
£000 £000 £000 £000
At 1 April 2022 495 1,267 2,642 2,645 7,049
Cash flows (600) 290 (252) (816) (1,378)
Interest 131 - 77 111 319
At 31 March 2023 26 1,557 2,467 1,940 5,990
6. Finance costs - Unaudited
Six months ended 30 September 2023 Six months ended 30 September 2022 Year ended 31 March 2023
(Audited)
£000 £000 £000
Interest on bank overdrafts and loans 124 83 242
Interest on mortgage 37 41 77
Interest on lease liabilities 43 53 101
Total 204 177 420
7. paid to the Sellers under the SPA of Emma Hardie Limited:
Further to the sale and purchase agreement ("SPA") relating to the acquisition
of the entire share capital of Emma Hardie Limited as announced on 28 July
2021, the Group made the final payment on 25 August 2022 under the SPA. The
Company and also entered a settlement and share buyback agreement with the
sellers in respect of certain matters related to the acquisition.
The final payment amounted to £1,424,000. This consisted of two components.
The first of which pertained to the SPA agreement. Under the SPA, if on the
date of twelve months from completion the volume weighted average middle
market quoted price of an Ordinary Share for the last 5 Business days prior to
that date (as derived from the Daily Official List of London Stock Exchange
Plc) were to be less than £1.25, then an additional amount would be payable
to the sellers in cash equal to such difference in price multiplied by the
number of Consideration Shares issued. This equated to £1,333,664. The second
component was in relation to the adjustment payment and the deferred payment
amounting in aggregate to £90,336. No further amount is due to be paid by the
Group under the SPA.
8. Share Buy Back of the Consideration Shares
Separately, it has been agreed with the two sellers that the Company buy back
800,000 Consideration Shares from each of them for a consideration of
£288,000, being an aggregate consideration of £576,000 (together the
"Buyback"). The consideration is based on the price of 36p per ordinary
share being the on-market price at the time of the transaction. The Buyback
took place on 26 September 2022.
The Company holds the total of 1,600,000 re-purchased shares as treasury
shares.
9. Exceptional items
Redundancy costs from the cessation of the second shift
To counteract the challenging market conditions borne by increases in supply
chain costs, the business has undertaken a significant cost reduction
improvement with the objective of improving profitability. This included the
move to a single shift operation in Peterborough which has been made
possible by the efficiency-driven investment in the previous year. This
unfortunately did result in redundancies which cost the business £0.15m in
the period to September 2022. There have been no such redundancies in the
6-month period to 30 September 2023.
Finalisation of Emma Hardie Limited SPA liability
As at 31 March 2022, £1,027,500 had been accrued in anticipation of the final
consideration paid to the Sellers under the SPA of Emma Hardie Limited. A
further £84,000 had been accrued in relation to the adjustment payment and
the deferred consideration as part of the SPA of Emma Hardie Limited. As
discussed in note 7 the actual payment amounted to £1,424,000. The shortfall
in the amount provided at the end of 31 March 2022 had a P&L impact of
£312,500 in the period to September 2022. There are no such costs for the 6
month period to 30 September 2023.
10. Related party transactions
The related party transactions that occurred in the six months ended 30
September 2023 are not materially different in size or nature to those
reported in the Company's Annual Report for the year ended 31 March 2023.
11. Availability of Interim Report
The Interim Report is being made available to shareholders on the Company
website www.creightonsplc.com. Further copies can be obtained from the
Company's Registered Office, 1210 Lincoln Road, Peterborough, PE4 6ND.
For more information:
Nicholas O'Shea, Director, Creightons
plc 01733 281000
Roland Cornish, Beaumont Cornish Limited 0207
628 3396
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR TJBJTMTBMBRJRecent news on Creightons
See all newsREG - Creightons PLC - Block listing Interim Review
AnnouncementREG - Creightons PLC - Directorate Change
AnnouncementREG - Creightons PLC - Half-year Report
AnnouncementREG - Creightons PLC - Directorate Change
AnnouncementREG - Creightons PLC - Director/PDMR Shareholding
Announcement